I've never seen that set-up on the seat stays before.

Is the brake threaded where the metal housing inserts into the arm? If so, what thread size/pitch?

If not, I might be tempted to tap it out to M5 and put in a barrel adjuster and run a regular housng to it. My only concern would be too sharp an angle from the housing to the adjuster causing drag but the only way to know that would be to physically try it.

Interesting project.